The House passed the budget bills that lay out the state budget for 2020 and 2021 on Thursday by a vote of 224-160. The budget would increase K-12 education funding by $164 million over 2 years by restoring stabilization grants to their full levels in 2020 and implementing new funding streams for vulnerable communities in 2021. It now heads to the Senate for committee review and a full chamber vote, before heading to the Governor’s desk.
The House received the Governor’s proposed budget in February, and the House Finance Committee has worked on it for almost two months. The Committee integrated the package of key education funding bills that the House Education Committee proposed earlier in the year, including more funding for most districts and an appropriation for an independent study commission that would study the state’s funding formula and make recommendations.
What’s Included in the Budget
On Tuesday, April 9, the House Finance Committee gave the House an overview of their budget proposal.
K-12 Education Funding
- Provides funding for full-day kindergarten by providing districts and charter schools with the full per-student adequacy amount. Currently, kindergartners count as ½ of a student for funding calculations, even if they attend full-day programs
- Restores stabilization grants to 100%, or their full 2016 payment in 2020
- Eliminates stabilization grants in 2021 and replaces them with targeted aid based on district poverty and property valuation, resulting in an increase in $164 million of state aid over the two years
- Appropriates $500,000 for an independent commission that will study the current formula that the state uses to fund our public schools, and make recommendations to the legislature in 2021
School Building Aid and Special Education
- Provides $81.3 million for current payments on the state’s current school building aid obligations, and provides an additional $19.3 million for new projects
- Provides $61.6 million for the special education program known as “Catastrophic Aid,” which reimburses districts for costs associated with students with exceptional needs
- Provides $1 million for charter school building lease aid
Preparing Students for Life After High School
- Provides $21.8 million to fund Career and Technical Education tuition and transportation aid
- Provides $1 million for Dual and Concurrent Enrollment Program, including Running Start, a program that allows high school students to earn transcripted college credits for eligible high school courses.
- Freezes tuition at New Hampshire universities by providing $174 in additional funding
- Moves the Governor’s Scholarship Program to the Department of Education and boosts provides $14 million for scholarships for qualifying New Hampshire students attending state universities, colleges, and other post secondary education programs
- Provides $113.5M to the Community College System of New Hampshire including funds to improve the system’s IT infrastructure
- Allows for the establishment of Governor’s Finish Line NH Scholarship Program, assisting mature students in completing their degrees at a NH Community College
- Establishes a position in the Department of Education to enhance security and privacy for student data
- Keeps the Education Trust Fund separate from the General Fund, to be utilized for adequacy, charter school aid, school building aid, SPED aid, and tuition and transportation aid
- Extends interest and dividends tax to capital gains for certain individuals, providing $150 million for education funding
- Authorizes sports betting to generate an estimated $10 million in education funding
According to our analysis, the proposed budget provides 154 communities with at least 5% more state funding over the current formula, and the most vulnerable communities are set to receive between 15% and 20% more state funding.
According to our analysis, if the extra funding were to be used strictly for property tax relief, Berlin would receive $4.3 million in additional aid, resulting in a 27% reduction in property tax rates. Northumberland would receive $1.1 million in additional aid, resulting in a 26% reduction in property tax rates.
Lisbon, Newport, Greenville, Farmington, Pittsfield, Troy, and Charlestown would also receive at least 20% reductions in property tax rates if the additional funding was used entirely to reduce property tax rates (and school budgets stayed the same).
Read more about our analysis here.
Next Steps for the State Budget
From the House, HB 1 and HB 2 go to the Senate. The Senate Finance Committee reviews the budget proposal, makes recommendations, and presents the proposal to the full Senate for a vote.
While they are voting on the bills, Senators can also propose floor amendments, which are voted on individually and must pass with at least 50% of the vote.
If the Senate makes any changes to the proposed budget, the House and Senate must come together in a “committee of conference.” There, a small group of House and Senate members work together to form a final proposal. The proposal goes back to the full House and the full Senate for a final vote before it goes to the Governor’s desk for signature.
If the Governor vetoes the budget, the House and Senate can override the veto with a two-thirds majority. If the override fails, the state continues the spending plan set in the previous biennium’s budget (known as a “continuing resolution”).
Governor Sununu and Education Funding
The Governor’s proposed budget did not provide more long-term education funding, but instead made one-time investments through a Targeted School Building Aid program, increased charter school funding, and increased funding for the special education fund known as Catastrophic Aid.
Governor Sununu has been vocal in his opposition to the House’s proposed budget, specifically to the increased education funding. From the Valley News:
[Governor Sununu] also took aim at Democrats’ plans to redirect the money for education, saying the move could deplete state coffers during an economic downturn.
“If we keep investing in big government programs to check a box and score some political points, that’s fine for the next year or two — or the next election cycle I suppose — but it’s not necessarily the smartest thing to do,” Sununu said. “Our responsibility in Concord is to invest 5, 10, 20 years down the road…”
Sununu replied that his budget proposal calls for “more dollars per student than any budget in history” by allocating $63.7 million for school building aid, $8.6 million for tuition and transportation to vocational schools and a $4 million increase in special education funding.
The Democrats also hope to fund their education goals by creating a capital gains tax pegged at the state’s existing 5% interest and dividends tax.
“The governor said that idea amounts to raising “massive amounts of taxes just to pile more money into the system.”
“You’ve got to be careful about doing that because once you open that door, it never closes,” Sununu said.
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